The House on Friday passed an FY21 spending measure that would increase Community Development Financial Institutions funding by $11.5 million and set aside $2 million for a pilot test of postal banking.
Voting 217-197, the House passed H.R. 7617, which combines six of the annual appropriations bills, including the Financial Services spending measure.
The bill includes $273.5 million for the CDFI program and $2 million for the National Credit Union Administration’s Community Development Revolving Loan Fund. The Community Development Revolving Loan Fund received $950,000 this year.
As passed by the House Appropriations Committee, the Financial Services bill’s report included provisions that would allow tests of postal banking. However, the bill did not set aside money for the pilots.
During House consideration of the measure, the House adopted an amendment sponsored by Democratic Reps. Marcy Kaptur of Ohio and Bill Pascrell of New Jersey—two longtime proponents of postal banking—setting aside $2 million for testing of the concept.
“With over 30 million unbanked and underbanked Americans, it is clear the free market banking sector has left too many working families behind, especially communities of color,” Kaptur said. “With a branch in every rural and urban zip code and trusted by all Americans, the Postal Service must provide a financial lifeline to those in need.”
“Ninety percent of zip codes lacking a bank or credit union are in rural areas,” Pascrell said. “Bank branches are also sparse in low income urban areas. Approximately 46 % of Latino and 49% of African American households are underbanked.”
The Credit Union National Association and the National Association of Federally-Insured Credit Unions joined other financial services trade groups in sending a letter to House members opposing the Kaptur-Pascrell amendment.
“We are deeply concerned that allowing the U.S. Postal Service to provide banking services will be beyond the Postal Service’s core competencies, will raise a number of serious regulatory and consumer protection questions, and could leave consumers less protected than they would be at a regulated financial institution,” the groups, including the American Bankers Association and the Independent Community Bankers of America, wrote in the letter.
The Senate has not yet started its annual appropriations process.